Consumer packaged goods companies see the value in applying new IT to enhance supply chain functions, but they haven’t mastered how to prioritize a growth-led over a cost-led agenda.

Consumers have changed. More than ever before, they want personalized, convenient and responsive products and services—and they want them fast. Their brand loyalty is short-lived—sometimes non-existent.

To compete, traditional consumer packaged goods companies need to continuously identify or create impactful trends, adjust their product portfolios and service capabilities to take advantage of those trends, and establish a different operating model and capability infrastructure to enable them.

Companies are investing in new IT—innovative solutions such as Artificial Intelligence, Blockchain, automation, Cloud infrastructure and advanced analytics—to enable these trends.

Nearly half (48 percent) of executives surveyed see good “value potential” in these investments. However, their efforts fall short of (orare missing) the major opportunity to capture value and power business growth through their supply chains. CPG companies must begin to see their supply chains as a way to differentiate and grow. They should align their IT investments to their overarching business strategy and determine where they will have the greatest impact. By elevating the significance of the supply chain to a key element of the business strategy, and applying new IT to transform the value chain into a flexible network of capabilities, companies are better able to achieve profitable growth. New IT can help eliminate or redefine linear value chains and function silos, poor response times, conflicting priorities and nonexistent fulfillment models, and enable the evolution to an intelligent supply chain that is, smart, agile, learning and service-oriented.

CPG companies are missing opportunities to use the supply chain to drive differentiation and profitable growth

Are you looking at supply chain decisions as business strategy decisions?

Chief technology officers (CTOs) and chief information officers (CIOs) are the top business stakeholders for technology
investment decisions in the CPG supply chain (tied at 39 percent). These individuals are contributing the maximum
amount of funding required to implement certain technologies within their organizations. Surprisingly, only 16 percent of companies said the chief executive officer (CEO) was the primary stakeholder for making IT investment decisions, and just 23 percent identified the chief financial officer (CFO) as the primary stakeholder.

For technology to significantly redefine the supply chain and contribute to the business strategy, we recommend that the CEO and CFO support more investments. At the same time, chief supply chain officers (CSCOs) and chief operating officers (COOs) can work with CIOs and CTOs to obtain sound guidance on the right technologies to enable leading-edge capabilities.

To achieve exponential value through IT, companies must measure value attained. Many CPG companies measure ROI on a cost-based business case. Instead, they need to place more emphasis on growth and differentiation. While this is not as easily quantifiable, the change can benefit the entire organization.

New IT, new era in supply chain

Consumers are no longer just buying products and services in this digital age. They are buying experiences—and your supply chain can make or break those. When aligned with the business strategy, the supply chain powered by new IT will enable leading capabilities and differentiated brand experiences that help fuel growth.

By evolving your operations with an intelligent supply chain that is smart, connected, innovative and agile from end to end, CPG companies can deliver enhanced value and drive efficient, profitable growth. An intelligent supply chain will enable them to deliver the right customer experiences and, ultimately, help to differentiate and grow the business. While there are many ways to begin supply chain transformation, the most important step is to get started now.

But where to start? There is no one-size-fits-all approach since it should depend on the company’s business strategy, market position and challenges. However, there are four important moves that will help companies to achieve their North Star vision for their supply chain.

Build the right strategy

Identify the top business priorities and determine how new IT can enable transformation.

Identify the right new IT to enable outcomes

Companies must determine which new IT will drive the right business outcomes and align with the strategy.

Pick the right partners

Ecosystem collaboration is essential to powering innovation that in turn will drive growth in the supply chain.

Find the right people

Core workforce can be upskilled to employ new IT in the supply chain. Businesses can also supplement skillset gaps by working with their partners.

Become more agile in the new.

Deliver enhanced value. Drive efficient, profitable growth.

By evolving your operations with an intelligent supply chain that is smart, connected, innovative and agile from end to end, CPG companies can deliver enhanced value and drive efficient, profitable growth. An intelligent supply chain will enable them to deliver the right customer experiences and, ultimately, help to differentiate and grow the business. While there are many ways to begin supply chain transformation, the most important step is to get started now.